The Dividends Paid account: Group of answer choices normally has a credit balance. increases equity. is increased with debits and decreased with credits. is not a proper sub-account of equity.

The Dividends Paid account is increased with debits and decreased with credits.

Here's why:

1. Dividends Paid is an account that records the amount of dividends that a company has paid to its shareholders. It is a contra equity account, meaning it reduces the amount of equity in the company.

2. In accounting, increases to contra accounts are recorded as debits and decreases are recorded as credits. This is the opposite of the normal balance for the type of account it is associated with. In this case, since Dividends Paid is a contra equity account and equity accounts normally have a credit balance, Dividends Paid is increased with debits and decreased with credits.

3. Therefore, the Dividends Paid account does not normally have a credit balance, it does not increase equity (it decreases equity), and it is a proper sub-account of equity.